The fourth of a six-part series examining prominent corporate crises impacting U.S.-based business operations during 2011.
On what began as a typical March morning turned into a deadly afternoon and evening after a 8.9 earthquake, the fifth largest in the world since 1900 and the largest to have ever hit Japan, occurred 231 miles northeast of Toyko out in the Indian Ocean. The epicenter was roughly 15.2 miles below the water surface, creating a tsunami. The Pacific Tsunami Warning Center issued warnings for Russia, Taiwan, Hawaii, Indonesia, the Marshall Islands, Papua New Guinea, Australia, and the west coasts of the U.S., Mexico, Central America, and South America. According to the official toll, the disasters left 15,839 dead and 3,647 missing.
The giant waves deluged cities and rural areas alike, sweeping away entire towns and carrying cars, boats and trucks miles inland. In Tokyo — hundreds of miles from the quake — skyscrapers swayed and terrified workers fled into the streets. Unfortunately, another calamity in Japan was beginning and this one was man-made.
Roughly one hour after the earthquake, Tokyo Electric Power Co (Tepco) reported emergency generators for reactors 1, 2 and 3 at the Fukushima Daiichi power plant failed and that the diesel-powered back up systems were also affected. This was followed by an explosion and eventual partial meltdowns in two reactors, then by a fire in another reactor which released radioactivity directly into the atmosphere.
Three of the plant’s six reactors overheated and their fuel melted down, and hydrogen explosions blew the tops off three reactor buildings, leading to a major leak of radiation at levels not seen since Chernobyl in 1986. In May, a team of 18 experts from 12 countries spent a week at the plant on behalf of the International Atomic Energy Agency (IAEA). Its preliminary report was delivered at the end of May to the IAEA Ministerial Conference in Vienna.
According to the report, the site’s poor location, inept regulatory supervision, poor employee training programs and gross mismanagement by government leaders greatly contributed to the disaster in four key areas. They are:
1. TEPCO officials grossly underestimated the risks tsunamis posed to the plant. Tokyo Electric assumed that no wave would reach more than about 20 feet, while these hit at more than twice that height.
2. Officials from Nuclear Safety Commission of Japan present at the plant during the quake, quickly left the site, and when ordered by government officials to return, failed to help workers racing to restore power and find water to cool temperatures at the plant.
3. Workers left at Fukushima Daiichi were not trained to handle multiple failures, and lacked a clear manual to follow. This communications breakdown meant plant workers possessed no clear understanding of the transpiring events.
4. Government officials failed to use data on the radioactive plumes released in sufficient time to warn local towns and direct evacuations. As a result, this failure allowed entire communities to be exposed to harmful radiation.
Implications for a U.S. nuclear renaissance appear to have dimmed as a result of the Fukushima accident. In an updated online report by the World Nuclear Assn. as few as four of the 26 new nuclear facilities that have been proposed or planned in the U.S. will be finished by 2020. Interestingly, the Fukushima accident was not cited as the preliminary rationale for the reduction but instead focused on the boom in domestic natural gas production, which has become a very popular fuel for generating electricity because of its clean burning nature.
Higher Education Doesn’t Translate to Higher Awareness
One of the last remaining sanctuaries of public trust blew apart in November 2011 when news of a child sexual abuse scandal involving a former Penn State University (PSU) football coach became public. Within weeks, the Penn State scandal was compounded by news from Syracuse University alleging that a former associate head basketball coach molested two former ball boys starting in the late 1970s and continuing into the 1990s.
The Penn State scandal brought down the legend that was Joe Paterno as he was fired for his failure to report allegations that Jerry Sandusky, a former defensive coach for the Nittany Lions, was seen by a graduate assistant coach engaging in sexual relations with a minor male child in a PSU locker room shower area. Instead of personally initiating action against a former colleague, Paterno tossed the issue onto the desks of the school’s athletic director plus a university vice president.
After a lengthy investigation, law enforcement officials have charged Sandusky with the sexual abuse of 10 boys over more than a decade. He has denied the charges and is free on bail while awaiting a trial in Centre County, PA. Charges against two administrators, Athletic Director Tim Curley and vice president Gary Schultz, were sent to county court in Harrisburg for trial after a preliminary hearing. After being charged, Curley was placed on administrative leave at his request, and Schultz retired.
At the center of the Syracuse scandal is Bernie Fine, an assistant to head coach Jim Boeheim until being fired in November 2011. Fine is now alleged to have molested three males at different locales ranging from Fine’s home to the basketball facilities at Syracuse to hotel rooms during recruiting visits. Fine denied any wrongdoing and has not been charged although a federal investigation is ongoing.